Verdant Financial Partners and Axis Auto Finance Announce Financing Update With Regard to Their Proposed Qualifying Transaction

TORONTO, ONTARIO--(Marketwired - April 27, 2016) -

NOT FOR DISSEMINATION IN THE U.S. OR THROUGH U.S. NEWSWIRES

Further to a press release dated December 31, 2015, Verdant Financial Partners I Inc. ("Verdant" or the "Company") (NEX:VFI.H), a capital pool company, is pleased to provide further details on the concurrent financing (the "Financing") being completed by 8095981 Canada Inc., operating as Axis Auto Finance ("Axis") in relation to the Company's proposed Qualifying Transaction (as that term is defined in the policies of the TSX Venture Exchange (the "Exchange")) with Axis. Unless otherwise stated, all dollar amounts referred to herein are to Canadian dollars.

The Financing is anticipated to result in aggregate gross proceeds of approximately $5 million, and includes proceeds from a $1.5 million convertible debenture (the "Axis Debenture"), which has already been issued on July 3, 2015, the private placement of units of Axis (the "Units") for gross proceeds of approximately $1 million, and the issuance of subscription receipts (the "Subscription Receipts") for aggregate gross proceeds of approximately $2.5 million.

The Axis Debenture is non-interest bearing and will automatically convert into common shares in the capital of Axis (the "Axis Shares") at a conversion price of $0.51 per Axis Share so long as the Qualifying Transaction closes within 60 days of the closing date of the Financing.

The Units will be issued at a price of $0.60 per Unit, and each Unit will be comprised of one Axis Shares and one-half of one Axis Share purchase warrant (each whole Axis Share purchase warrant, an "Axis Warrant"), with each Axis Warrant entitling the holder to acquire one additional Axis Share at an exercise price of $0.90 per Axis Share for a period of three years from the date of issuance, subject to certain acceleration provisions described below. In connection with the Qualifying Transaction, the Axis Shares and Axis Warrants underlying the Units, including those issued pursuant to conversion of the Subscription Receipts as described below, will be exchanged for common shares and warrants of the issuer resulting from the Qualifying Transaction (the "Resulting Issuer"). The Resulting Issuer warrants will contain the same terms and conditions of the Axis Warrants, including, for greater certainty, the acceleration provision described below.

The Axis Warrants will contain an acceleration provision providing that if at any time during the term of the Axis Warrants the volume weighted average price of the common shares of the Resulting Issuer on the Exchange, or such other exchange on which the common shares of the Resulting Issuer are then listed for trading, is equal to or greater than $1.20 over a period of 20 consecutive trading days (the "Acceleration Period") then, subject to the Resulting Issuer issuing a press release announcing the acceleration, Verdant may give notice to the holders of the Axis Warrants that the Axis Warrants shall expire on the date that is 30 days from the date of notice. During such 30 day period, the holders may exercise their Axis Warrants in accordance with their terms.

In connection with the issuance of the Subscription Receipts, Axis has engaged Dundee Securities Ltd. to act as lead agent (the "Lead Agent", and together with any co-agents or syndication members, the "Agents"). The Subscription Receipts will be issued at a price of $0.60 per Subscription Receipts and will be automatically converted into Units upon satisfaction of certain conditions (the "Escrow Release Conditions"). Gross proceeds of the Subscription Receipt Proceeds (the "Escrowed Proceeds") will be held in escrow until the Escrow Release Conditions have been satisfied. The Escrow Release Conditions are: (a) the definitive agreement (the "Definitive Agreement") regarding the Qualifying Transaction shall have been entered into on terms acceptable to the Lead Agent, acting reasonably, and the completion or satisfaction of all conditions precedent to the Qualifying Transaction set forth in the Definitive Agreement shall have occurred or been waived, other than the filing of the articles of amalgamation and the release of the Escrowed Proceeds; (b) the receipt of all required shareholder, third party (as applicable) and regulatory approvals required for the Qualifying Transaction, the Financing and the consolidation of Verdant's issued and outstanding common shares; (c) the receipt of conditional approval of the Exchange for the Qualifying Transaction and the listing of the common shares of the Resulting Issuer to be issued in connection with the Qualifying Transaction; (d) Axis shall not be in breach or material default of any of its representations, warranties or covenants under the agency agreement to be entered into in connection with the Financing except for those breaches or defaults that have been waived by the Lead Agent, in its sole discretion; (e) there shall not have been discovered any previously undisclosed material fact relating to either Axis or Verdant that, in the reasonable opinion of the Lead Agent, would reasonably be expected to have a material adverse effect on Verdant or the Resulting Issuer, which shall be confirmed to be true to the Lead Agent in a joint certificate signed by a senior officer of each of Axis and Verdant; and (f) Axis and the Lead Agent shall have delivered an escrow release notice to the escrow agents confirming that all of the Escrow Release Conditions have been satisfied or waived.

The Agents will be entitled to receive from Axis a cash fee of approximately 2% percent of the gross proceeds of the Financing (the "Agents' Fee"), of which 50% shall be paid on the closing date of the Financing and 50% shall be paid concurrently with the release of the Escrowed Proceeds to Axis. Additionally, the Agents will also be entitled to reimbursement for its reasonable fees and expenses (including those of the Lead Agent's legal counsel) incurred in connection with the Financing. As additional consideration for the services of the Agents, Axis has agreed to issue to the Agents such number of compensation warrants (the "Compensation Warrants") as is equal to 6% percent of: (i) the number of Subscription Receipts sold pursuant to the Financing; (ii) the Units issued directly by Axis for aggregate gross proceeds of approximately $1 million; and (iii) the number of Axis Shares issuable upon conversion of the Axis Debenture. Each Compensation Warrant shall entitle the holder thereof to acquire, at any time for a period of two-years from the date of issuance, one Unit at a price of $0.60 per Unit provided that, pursuant to the Definitive Agreement and the completion of the Qualifying Transaction, each Compensation Warrant be exchanged for one Resulting Issuer compensation warrant (a "Resulting Issuer Compensation Warrant"). Each Resulting Issuer Compensation Warrant shall entitle the holder thereof to acquire one Resulting Issuer unit of Verdant (each, a "Resulting Issuer Unit") at a price of $0.60 per Resulting Issuer Unit. Each Resulting Issuer Unit shall be comprised of one common share of the Resulting Issuer and one-half of one Resulting Issuer common share purchase warrant, with each such warrant having the same terms as the Axis Warrants (including being subject to acceleration as set out above).

In addition to the Agents' Fee, Axis will also pay a cash finder's fee to an arm's length party equal to 2% of the principal amount of the Axis Debenture upon closing of the Qualifying Transaction as well as finder's fees and due diligence expenses to arm's length parties equal to approximately 5.8% of the aggregate gross proceeds from the sale of the Units and Subscription Receipts.

Following completion of the Financing and the Qualifying Transaction, the Resulting Issuer will have approximately 51,168,004 common shares issued and outstanding, consisting of: (i) approximately 589,082 common shares of Verdant on a post-consolidation basis; (ii) approximately 38,880,567 common shares issued to current shareholders of Axis; (iii) up to 3,488,888 common shares of the Resulting Issuer issuable to a lender of Axis upon exercise of Axis Shares purchase warrants by such lender at exercise prices ranging between $0.25 and $0.45 per share upon completion of the Qualifying Transaction; and (iv) a minimum of 8,774,508 common shares issued in exchange for the Axis Shares issued as part of the Financing. In addition, the Resulting Issuer will have issued a minimum of 2,083,333 share purchase warrants in exchange for the Axis Warrants issued as part of the Financing, and 4,076,333 stock options consisting of: (i) 58,833 stock options held by the current directors and officers of Verdant; and (ii) 4,017,500 stock options issued to the current optionholders of Axis. The Agents will also hold a minimum of 500,000 Resulting Issuer Compensation Warrants.

About Axis

Axis provides non-standard automobile financing options targeting roughly 30% of Canadians that do not qualify for traditional bank financing. Through personalized service and a commitment to building strong, long-lasting relationships with their dealer partners, Axis is becoming one of Canada's fastest-growing auto-financing companies. Axis offers underwriting flexibility, fast adjudication, dealer perks and excellent service. Axis' auto financing program is available to both independent and franchise dealers and prides itself on personalized service in helping dealers close more deals faster.

All information contained in this news release with respect to Verdant and Axis was supplied by the parties, respectively, for inclusion herein, and Verdant and its directors and officers have relied on Axis for any information concerning such party.

Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Qualifying Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

This news release contains forward-looking statements relating to the timing and completion of the Proposed Transaction, the future operations of the Company, Axis, and the Resulting Issuer and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the Proposed Transaction and the future plans and objectives of the Company, Axis, and the Resulting Issuer are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's, Axis, and the Resulting Issuer expectations include the failure to satisfy the conditions to completion of the Proposed Transaction set forth above and other risks detailed from time to time in the filings made by the Company, Axis, and the Resulting Issuer with securities regulations.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, Axis, and the Resulting Issuer. As a result, the Company, Axis, and the Resulting Issuer cannot guarantee that the Financing or the Qualifying Transaction will be completed on the terms and within the time disclosed herein or at all. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and the Company, Axis, and the Resulting Issuer will update or revise publicly any of the included forward-looking statements as expressly required by Canadian securities law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this press release.